Annual report 2010 - plazacenters

Financial statements
Notes to the consolidated financial statements
continued
Note 11 – Long-term deposits and other investments
Interest rate as of December 31, December 31,
December 31, 2010 2009
2010 €’000 €’000
Financial structure A* 0-11.5% 38,000 38,000
Financial structure B** 6.25%-12.5% 14,017 12,952
Long-term loan to associated Company 7% 542 495
52,559 51,447
* Structure A – The EUR 38 million Principal is capital protected and payable at Maturity. Structure A bears interest of 11.5% per annum, payable quarterly to the extent that the
margin between the 30-year Euro CMS (Constant Maturity Swap) and the 10-year Euro CMS (measured on a daily basis) is higher than the accrual barrier which was set at 0.05%.
For days in which the margin is lower than the barrier no interest is paid. Structure A is presented in the financial statements as held to maturity financial instrument
at amortized cost. Although Structure A is callable by the issuer, the Company has the ability and a positive intent to hold Structure A until it is called or until maturity, and the
Company would recover substantially all of Structure A carrying amount. The fair value of the Structure, determined by management based on the broker quotes, as of
December 31, 2010 was EUR 27.7 million.
** Structure B – The EUR 13 million Principal of the Structure is capital protected and payable at Maturity. Structure B pays a variable interest linked to the 10-year EUR CMS rate
subject to a minimum interest of 6.25% p.a and a maximum interest of 12.50% p.a. The Company’s management has designated Structure B at fair value through profit or loss
since the contract contains a substantive embedded derivative. The value reflects the clean value of the structure (i.e without interest). For determining the fair values of the
structured deposits refer to note 4. As of December 31, 2010, the Company recorded a fair value gain of EUR 1.1 million (2009: gain of EUR 3.1 million) in respect to Structure B.
An amount of EUR 0.7 million is outstanding as interest receivable due to structure B.
Note 12 – Property and equipment
Land and
buildings Equipment Fixtures and fittings Airplanes Total
€’000 €’000 €’000 €’000 €’000
Cost
Balance at December 31, 2008 7,057 4,572 1,258 9,099 21,986
Additions – 320 118 – 438
Disposals – (229) – – (229)
Exchange rate effect – 6 – 75 81
Balance at December 31, 2009 7,057 4,669 1,376 9,174 22,276
Additions – 490 21 – 511
Disposals – (29) – (5,226) (5,255)
Reclassification – 400 – – 400
Exchange rate effect – 62 – 789 851
Balance at December 31, 2010 7,057 5,592 1,397 4,737 18,783
Accumulated depreciation
Balance at December 31, 2008 2,289 1,873 928 1,103 6,193
Depreciation expenses 92 611 25 459 1,187
Disposals – (69) – – (69)
Exchange rate effect – – – (25) (25)
Balance at December 31, 2009 2,381 2,415 953 1,537 7,286
Depreciation expenses 182 887 33 819 1,921
Reclassification – (187) – – (187)
Disposals – (41) – (1,652) (1,693)
Exchange rate effect – 30 – 65 95
Balance at December 31, 2010 2,563 3,104 986 769 7,422
Carrying amounts
At December 31, 2010 4,494 2,488 411 3,968 11,361
At December 31, 2009 4,676 2,254 423 7,637 14,990
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Plaza Centers N.V. Annual report 2010